BEEF AT RISK: Shops and restaurants braced for the worst

Consumer impact: Supermarkets, butchers and burger bars all braced for a sharp fall in multi-million pound sales of meat

Supermarkets, butchers and burger bars were braced for a sharp fall in beef sales yesterday as British business began to calculate the potential cost of the Government's announcement on BSE.

Supermarkets rushed out statements assuring customers about the quality of their beef but are expecting sales to fall as shoppers switch to other meats, such as chicken and pork.

Sainsbury is considering signs in its stores as well as information labels on beef products but said it was too early to make a decision. The supermarket groups have not yet decided whether to reduce the amount of shelf space devoted to beef.

Sainsbury said: "Whenever there is any media coverage of BSE there is a noticeable shift away from beef and towards other meat products. We expect the same to happen this time." The company has briefed its customer- service staff, who expecting a deluge of calls today as customers seek reassurance on beef quality.

Asda said its beef sales had been increasing in recent months but said it was too early to say how the public might react to the new fears. Tesco said its beef sales had dipped late last year but had been recovering.

The multi-million-pound British beef industry admitted that the new evidence could dramatically affect sales which recovered well from previous scares. But the Meat and Livestock Commission (MLC) insisted exports would not be hit hard, arguing that consumer confidence abroad would remain high.

Last year the industry saw the value of beef exports increase from pounds 440m in 1994 to pounds 520m, which amounts to 277,000 tons of meat being shipped abroad.

In Britain, the beef industry is worth around pounds 2.3bn to farmers and pounds 4bn on the market. In 1995 Britain consumed 890,000 tons of beef, down by 30,000 on the previous year.

However, sales have slumped with each beef scare since details of BSE emerged in late Eighties and the MLC fears sales will be affected by the latest development in the BSE furore.

A spokesman said: "There is no direct evidence of a link but we are concerned about any adverse effects on trading. Inevitably it could result in some people going out of business."

Sales fell by 17 per cent following the beef scare before Christmas, although February figures showed a 5 per cent recovery. Sales plummeted by 20 per cent after the major BSE scare five years ago, but recovered within nine months. Owing to previous recovery trends, the MLC hopes the industry will cope with the latest scare.

"There have been no signs that French and Spanish consumers have any interest in this problem at all. They are satisfied with the work being done through the veterinary agencies," a spokesman said.

The Vegetarian Society predicted a rise in the number of people abandoning meat as a result of fears over the safety of beef.

Spokesman Steve Connor said one of the growing trends is that people are giving up meat altogether as a result of beef scares. "It is inevitable as beef is traditionally the king of meats."

Burger bars are likely to suffer falling sales, though most were insisting yesterday that they were not worried by the latest developments.

McDonald's, which has 660 outlets in Britain, said it welcomed the Government's moves to tighten controls on the supply and quality of beef. It stressed that it only used prime cuts of boneless beef "in which BSE has never been detected".

A spokeswoman for Burger King, which has more than 350 British branches, said it would be looking at the Government's comments but added: "We do not, never have and never will use mechanically recovered meat or offal in any kind of product which were the main worries, so we have no worries about our burgers."

An Aberdeen Steakhouse spokeswoman denied that BSE fears had affected profits, saying that none of the findings were concrete. "I think everyone takes it all with a pinch of salt."

Dewhurst, Britain's largest butchers chain, which was sold to its management last year, is also likely to be affected. The management was not available for comment yesterday.

Many of Britain's largest food companies have been selling their red- meat businesses after falling sales. Hillsdown Holdings, the food group which owns Buxted Chickens, has been expanding its poultry interests and will benefit from the latest scare.

Unigate, the dairy group, has established itself as Britain's largest pork producer.